Debt! Debt! Debt!

I’ve read several articles and books on how much debt is acceptable.  Some state that debt should be no more than 5% of your income; others state you should not have debt at all.  There may be times when you feel you must go into debt in order to better your life such as a school loan.  Remember though…

The rich rule over the poor and the borrower is servant to the lender. 
Proverbs 22:7

If you owe a car loan to Bank of America, then you are a servant to Bank of America.  If you thought you really needed that treadmill and completed a loan through Sears because you didn’t have the cash, then you are a servant to Sears.   

Debt will play a part in decisions you make.  It can prevent you from spending time with your children because you are working extra hours.  It can cause stress and arguments with your spouse when you realize you can’t afford to pay a babysitter and go on a date BECAUSE you have that credit card payment to make. 

DEBT EXAMPLES:  car loans, credit card, second mortgage, school loan, loan from family, “no payments until 2009” furniture loans, car title loan, pawn shop loan

I challenge you to get out of debt.  If a store offers you no payments until 2010, RUN!  You may have to thrown a blanket over the old couch you were looking to replace but if you have no cash…do you really want to be a servant to Rooms To Go?
Thanks for listening!  Dana

p.s.  Mortgage loans are also considered debt but I’ll address smart ways of having that loan in a later post.

Advertisements

Joint versus Separate Accounts

There are married couples who have separate savings and checking accounts.  Though I will argue that having joint accounts is best for several reasons.  

At the get go of our marriage, Mike and I have always had joint accounts for our money. Having separate accounts really never crossed my mind and even now really isn’t an option for us.  Here’s why………

1)  Builds accountability. We have set up rules with our finances.  I always let Mike know when I withdraw money from the accounts (because he keeps the books) or we have a discussion first about any big ticket items. One of our financial goals is to get out of debt so we hold each other accountable by discussing purchases so that we don’t go into debt to pay for them.

2) Establishes trust.  I trust my husband and he trusts me.  We are honest to one another and do not make any decisions without the other’s acknowledgment.   

3)Gives a clearer financial picture.  We know what the bank accounts look like and what our expenses look like. This helps in obtaining any financial goals. Joint accounts allow us to work together to meet those financial goals.

4) Fosters a mutual belief that God owns everything. My husband and I believe that God does own everything and that we are just stewards of what he has given us.  We operate together under this principle and try to honor our Lord with our finances. 

Well what does the Bible say in reference to this subject?  Well, this is the verse that keeps popping up in my mind.  Matthew 12:15…………..A house divided against itself shall not stand.  I just think that having separate accounts can lead down the road of division.  And a house divided will fall.

Separate accounts can foster distrust, suspicion, dishonesty, and resentment. It also can foster an attitude of selfishness and quite frankly a host of other problems.

Charlotte

Shopping with a pro!

My friend Christina is a pro at grocery shopping.  She has offered to take me shopping with her several times when I’ve vented about how much it costs to feed my family.  I clip coupons, review the sale papers and try to plan meals in order to save money.  But I still spend more than Christina does each week on groceries. 

After spending the day with her in multiple stores, I realized how knowledgeable she really is in this area.  She is an expert at where to buy what for the lowest price.  As we walked through Sam’s, our discussion included toilet paper, ketchup, what’s a good price on buying a pack of 40 of something and can it be used before it expires.  

                                    

So, if you are struggling with trying to lower your grocery bill, ask a friend that is really good at grocery shopping if you can tag along one day.  We take classes on parenting, bible lessons, cooking, etc…why not take a hands on “class” to fine tune your grocery shopping skills?  I know I learned several things on our outing and plan to go with her again!  Kudos Christina!

May you have a joyful and bargain experience on your next grocery store trip!  Dana

I can’t afford to…

A friend recently shared that they were having financially hard times.  I completely understood because I’ve heard similar stories from people this year.  I REALLY have to watch my words when someone shares with me regarding finances.  I try not to give my opinion unless the person asks me directly what I think.  Many times people just want you to listen and not give feedback when it comes to financial matters.  It’s very hard though when a person shares what financial hardships they are going through yet they admit they are still living the lifestyle they can’t afford.  They admit they can’t tithe nor pay their bills on time; yet they continue to take summer vacations, buy things on credit or refuse to cut back on extras.

If you are on your way into a hole financially, STOP and really put a hold on things you are buying or spending money on.  I’ve heard many comments from people that it’s embarrassing to give up the standard of lifestyle they are living, it hurts their husband’s pride or ego to cut out things or their children won’t understand.  While all of this may be true, it’s much easier to stop and backtrack then to hit bottom and crawl back.

Your neighbor, sibling, co-worker, church member, best friend may be living the high life, borrowing money from parents, on the verge of losing their house and fighting every week over money.  Are you accountable to that person to stay in the same lifestyle?  or are you accountable to God?

I admire each of you who are seeking better ways to manage you money.  Don’t get discouraged!  DANA

Luxury Expenses

Yesterday we talked about what to do if your budget doesn’t balance…one thing to look at is what I call luxury expenses.  Here are some alternative ideas to cutting or reducing these expenses.  Some of these are not new ideas.  It all comes down to a person’s willingness to recognize their financial troubles or wanting a simpler life,  then having the courage and determination to change it.   

Cell Phone/Home Phone – Cancel one or keep both but cut all the extras on your home phone.  My family and closest friends have my cell number and call it if my home line is busy.  Most of my contacts know that we do not have call waiting.  If there are times when I am in the middle of something and don’t feel like answering the home phone, I let my answering machine pick up.  If it’s important enough, the person will leave a message.  I also registered on the www.donotcall.gov site to reduce telemarketing calls.

Cable/Satelitte TV– You can purchase a $15-$20 antenna from Wal-Mart or Target that will pick up most channels.  Our antenna picks up NBC, CBS, FOX, PBS and about 4 other local channels.  Be sure and get the kind that plugs into an outlet also.  This extra feature provides much better reception and reduces the need to adjust the “rabbit ears”. 

Dining Out – This is one of my priority luxury expenses.  For my husband and I, we were willing to do without cable so we could continue to eat out on a regular basis.  We enjoy trying new restaurants so this was a priority for us.  If eating out is not a big deal to you but cable is, then keep the cable and cut back on the dining out.

Lawn Treatment – Many companies now offer no contract.  I have heard that the best time to fertilize and help with weed control is in the Winter and Spring.  Therefore, you could actually limit or cut out lawn treatments in the Summer and Fall.  Or you could research gardening sites and do your own weed control.  I know that some subdivisions now require yards to be weed free so make sure you know all the homeowner regulations before buying in a subdivision.  Lawn treatments could be an added expense you did not anticipate.

Manicures, Spa Treatments – If this is a priority on your list, instead of cutting it out completely, look at reducing the number of times you have it done or look for a less expensive place to visit.

Shopping – I have a friend who uses part of her day off to bargain shop.  She manages her shopping well by 1) doing most of it at thrift stores and consignment places, 2)  usually only paying with cash and a set amount, 3) doesn’t use shopping to fill a void and 4) although she may buy something decorative for her house, she also pays much less for school clothing, books or other needed things for her household.  If you love to shop but overspend, set an allowance for yourself and instead of heading to the mall, find a nifty consignment or thrift store.  I can’t tell you the number of name brand items (some with tags still attached) or barely used items she has found.   Just as I have a hobby of scrapbooking, some people have a hobby of bargain shopping.   

EVERYONE has things they feel they can’t live without…things that make our lives more comfortable or enjoyable.  I’m not suggesting you cut out all these things (except in extreme cases) but to really look at all the extra “stuff” your money is going towards.  You might find that by cutting a few things, you come up with an extra $200 a month that enables you to save more, pay debt off faster, have your spouse quit a second job or in some cases keep your home.  Think what luxury items you have and evaluate if their cost is really worth the burden they are placing on your finances.

Until next time…have a joyful week!   Dana